Can online courses with large-scale interactive participation and open access via the web replace face-to-face teaching in a traditional university setting? Newsnight's David Grossman examines the rise of massive open online courses (Moocs).

When the internet hits an industry the result is usually pretty dramatic.

Newcomers with revolutionary business models blow away the old established players. Think what happened to Kodak when photography went digital, what happened to high street book shops when Amazon got going.

The technology that allows one professor to teach not just one student but 100,000 really changes the economics of higher educationProfessor Andrew Ng , Mooc innovator

Now it is the turn of higher education, and not even the cleverest professors can say for sure how this is going to play out.

Right now this change is focused on the Mooc - shorthand for massive open online courses.

Essentially these are packaged up pieces of learning that last a few weeks, are often put together by a top professor at a top university, and are available to anyone with a computer. Enrolment is unlimited, there are no entry requirements, and they are completely free.

Mooc providers will tell you proudly that their product is not an alternative to going to university, it is an alternative to not going to university.

One of the big players in the Mooc world is Coursera, set up by Andrew Ng and Daphne Koller, two computer science professors at Stanford University in the United States.

Audience leap

About two years ago Prof Ng decided to put lectures from his Machine Learning course online, with spectacular results:

"I put one of my courses online and it reached an audience of 100,000 students," he says. "To put that number into context, I used to teach 400 students a year at Stanford, that means that to reach a comparable sized audience I would have had to teach at Stanford for 250 years."

Watch Newsnight's film on MOOCs in full on Monday 1 July 2013 at 2230BST then afterwards on the BBC iPlayer and Newsnight website

It was then he realised the scalability that the internet can give education.

"I think Moocs have a huge potential. The technology that allows one professor to teach not just one student, but 100,000 really changes the economics of higher education," Prof Ng says.

"Once you've created the course content it costs almost nothing to sign up another student. What that means is we can afford to connect everyone in the world to a great education."

But not everyone agrees with this rosy assessment. Some fear that once established Moocs will be used more and more to replace traditional universities - one professor being able to reach hundreds of thousands of students reducing the need for professors, one university being able to reach tens of millions of students meaning we need fewer universities.

Refusal to teach

In California state-run universities are experimenting with Moocs in their undergraduate programmes.

What is a MOOC?

Mooc stands for a massive open online course

It is an online course aimed at large-scale participation and open access via the internet

They are similar to university courses, but do not tend to offer academic credit

A number of web-based platforms - including edX, Coursera and Udacity - supported by top universities and colleges offer Moocs in a wide range of subjects

However, university staff are not happy and see this as the beginning of cost-cutting and reduction in quality for publicly funded universities.

Professors in the philosophy department at San Jose State University have refused to teach a Mooc on justice developed by Harvard Professor Michael Sandel and have written him a scathing open letter in which they said they do not want to enable what they see as a push to "replace professors, dismantle departments, and provide a diminished education for students in public universities".

So far there are few formal credits or qualifications available through the new wave of Moocs. It is not even clear what the business model is and how the Mooc providers, which are mostly commercial organisations, cover their costs let alone turn a profit.

But Prof Ng says that employers are increasingly favouring candidates with completed Moocs on their CVs.

"It won't necessarily get you the job, but it might get you the interview," he says.

UK plan

In Britain we lag behind the US, despite the fact that the UK pioneered distance learning with the Open University (OU) - now celebrating 40 years since its first graduations.

Now the OU is leading a consortium of 21 other universities as well as big cultural players like the British Museum and the British Council to form Futurelearn, which will begin providing Moocs in the autumn.

Although they do not pretend to be able to replicate the full "campus experience", Futurelearn's CEO Simon Nelson says they intend to use the power of social media to connect course participants.

Here students have a very one-to-one or two-to-one experience. We see that as a fantastic model that we're not going to give up." Dr Sally Mapstone , Pro-Vice-Chancellor for Education at Oxford University

"This is much more than simply pumping out videos," he says. "And this isn't just a redistribution of traditional education. This is about trying to use a connected environment of the web to try to re-invent learning in some way."

Moocs allow education to begin harnessing the power of big data. Students can get a precise fix on their progress, as can their teachers, if they have one. And professors can see what works and adapt their courses accordingly.

At the moment the big players in the Mooc world are in the US and they include some of the world's most prestigious universities - on the east coast Harvard and MIT, and on the west coast Stanford.

In contrast, in the UK Oxford and Cambridge Universities are holding back from joining in.

Dr Sally Mapstone Pro-Vice-Chancellor for Education at Oxford University, says there is a danger of a "lemming-like rush" towards Moocs. The university already has a considerable community education programme and puts many lectures online, but is loathe to offer Moocs.

"We think we have a great way of teaching here through tutorials and colleges," she says. "Students have a very one-to-one or two-to-one experience. We see that as a fantastic model that we're not going to give up."

But that does not mean Oxford will never offer Moocs at some point. To students as an aid to their existing coursework rather like an online text book, and perhaps to outsiders as a showcase for the university.

Costs in higher education are rising fast. Here in the UK students wary of debt may welcome a cut price alternative to the standard £9,000 a year in tuition fees.

Former US President Bill Clinton said recently the higher education industry needs to undergo a "dramatic change".

"I think the only sustainable answer is to find a less expensive delivery system," he said.

The Mooc could just be the answer. The question is, at what cost?

Watch David Grossman's film in full on BBC Newsnight on Monday 1 July 2013 at 2230BST then afterwards on the BBC iPlayer and Newsnight website.